LIVING OFF OF OTHERS

Today, more than half of our country is dependent on Washington, continuing a trend that should disturb anyone who doesn't consider himself or herself a socialist, says Investor's Business Daily.

According to Gary Shilling, an economist in Springfield, N.J.:

Some 52.6 percent of Americans, which includes dependents of direct recipients, now receive significant income from government programs.

Seven years ago, that number was 49.4 percent; in 1950, a mere 28.3 percent of Americans relied on Washington.

Shilling says that if the current pace is not abated in 10 years, the percentage could exceed the 55 percent mark of 1980, the year Reagan was elected on a platform of scaling back the federal behemoth.

By 2040, it could be 60 percent, Shilling reckons.

How did we get here? According to Shilling:

About 20 percent of Americans rely on Washington for their income through federal jobs or jobs that are connected to the government.

Another fifth have a government pension or receive Social Security; 19 million take food stamps; 2 million live in subsidized housing and 5 million accept education grants.

This bodes ill for any prospects of cutting government back to any reasonable size and reforming our messy and intrusive tax system, says IBD. While rates have been cut during President Bush's stay in the White House, it's a good bet that a decade from now a return to punitive taxation will be easier to legislate than tax cuts.

How long before the most productive Americans decide that they will no longer prop up the poorest and least productive? They'll have the option to either seek a tax-haven nation where government isn't a growth industry, or they can choose to be less productive, says IBD.

Source: Editorial, "Living off of Others," Investor's Business Daily, April 17, 2007.